ig operations manual

1 MB·

by  South Florida Water Management District

Office of Inspector General
Operations Manual

2014 Revision

Prepared by

J. Timothy Beirnes, CPA, Inspector General
South Florida Water Management District
Office of Inspector General INDEX
Operating Manual

CHAPTER 1 INTRODUCTION

CHAPTER 2 PROFESSIONAL CONDUCT

CHAPTER 3 ANNUAL WORK PLAN

CHAPTER 4 PERFORMANCE AUDITS

CHAPTER 5 FINANCIAL AUDITS

CHAPTER 6 INFORMATION SYSTEMS AUDITS

CHAPTER 7 INVESTIGATIONS

CHAPTER 8 INSPECTIONS, EVALUATIONS, and REVIEWS

CHAPTER 9 NON-AUDIT SERVICES

CHAPTER 10 WORKING PAPERS

CHAPTER 11 STAFF DEVELOPMENT

CHAPTER 12 QA & REPORT PROCESSING

CHAPTER 13 FOLLOW-UP

CHAPTER 14 ADMINSTRATIVE ISSUES

CHAPTER 15 FORMS
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Office of Inspector General Introduction
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This manual codifies the procedures that staff in the Inspector General’s Office
are required to follow in the daily performance of their duties at the District. The
Internal Audit Charter (District Policies and Procedures, Sections 101-201
through 101-208) is incorporated by reference. In addition, members of the
Office of Inspector General should thoroughly familiarize themselves with the
Audit and Finance Committee Charter (District Policies and Procedures, Sections
101-221 through 101-224).

Our Mission

Our mission is to provide citizens living within the boundaries of the South Florida
Water Management District including their Governing Board, elected
representatives, and District management with an independent view of
operations through objective and professional audits, investigations, reviews,
and evaluations of the economy, efficiency or effectiveness of taxpayer-financed
programs.

Our Vision

We strive to be among the best Inspector General organizations in the State,
recognized by our customers and our peers for innovation, the integrity of our
audit work, and the quality of our reports. We are committed to promoting
teamwork in a diverse workforce, and encouraging personal and professional
growth.

Our Guiding Principles

A commitment to quality governs our work. We define quality as work that is:
objective and unbiased, accurate, timely and meaningful, and presented in a way
that is most useful to our customers.

Quality will pervade our work culture, which will be characterized by customer-
focused continuous improvement in all that we do. We will strive to routinely
meet or exceed customer expectations. To ensure success in achieving our
vision, we will:
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 maintain an absolute, proactive, and long-term commitment to customer-
focused, continuous improvement, and

 act as role models for the quality values we espouse.

Our Goals

1. To enhance District accountability by assessing the performance of programs
and functions, and by effectively communicating the results of our work.

2. To search for and to expose illegal, wasteful, or abusive use of public
resources.

3. To improve District operations by recommending changes to increase the
economy, efficiency, and effectiveness of government run or supported
programs and processes.

4. To provide high quality professional services in carrying out the Inspector
General's statutory audit responsibilities.

5. To provide a stimulating and rewarding place to work, and to encourage the
continuing professional development of our employees.

Authority

The legal basis for the Inspector General's authority to conduct audits and
investigations are contained in Section 20.055, Florida Statutes, Agency
Inspector General.

Section 373.079(4)(b), Florida Statutes, authorizes the Governing Board to
appoint an Inspector General whose scope of work is unrestricted. Our office is
independent of District management and cannot be prevented "from initiating,
carrying out, or completing any audit or investigation." As such, we also have the
authority to audit the records of private firms and nonprofit organizations, which
are awarded contracts by the District or receive District funds through
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cooperative agreements.

We are also responsible for advising on performance measures, standards and
procedures, and assessing the reliability and validity of information systems.

We also help ensure that there is effective coordination and cooperation with
federal and state auditors with a view towards facilitating their work and avoiding
duplication.

Whistle-Blower Act

Sections 112.3187 through 112.31895, Florida Statutes, constitute the “Whistle-
blower's Act”. The intent of this act is to prevent retaliatory action against an
employee who reports violations of laws or improper use of government office,
gross waste of funds, or any other abuse or gross neglect of duty committed by
an employee or agent of the District or independent contractor.

We are responsible for receiving, investigating, and reporting to the appropriate
authorities, at the conclusion of any investigation arising from any disclosure
covered under this Act.

The Whistle-blower policy outlines the process for disclosing, investigating, and
maintaining the confidentiality of information, regarding allegations of violations
of the law on the part of an employee or agent of the District, or independent
contractor that create a substantial and specific danger to the public's health,
safety, or welfare. More information on the Whistle-blower Act is contained in the
District’s Whistle-blower Policy (District Policies and Procedures, Sections 101-
101 through 101-113). However, District employees are encouraged to contact
our office if they require assistance in interpreting the act and its applicability to
their particular circumstances.
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Access to Records

During an audit, we will require access to records, files, and other information to
effectively complete the audit. We have access to any records, data, and other
District information per Section 20.055(5)(c), Florida Statutes. We are granted
access to all District records and documents; have the ability to request
reasonable assistance from appropriate personnel in acquiring requested
records and documents; have inspection privileges to all assets owned, leased
or borrowed by the District, and have entry privileges to all facilities used by the
District.

Auditors are expected to maintain the confidentiality of any records that are
confidential and are subject to penalties for violating confidentiality.

An audit report and related work papers become public record when the audit
becomes final. An audit becomes final when it is presented to the Governing
Board (Section 119.0713(2)(a), Florida Statutes)

Audit Standards

The conduct and performance of our audits are guided by professional auditing
standards issued by the following standard setting bodies:

1. U.S. General Accounting Office (Government Auditing Standards)
(the “Yellow” Book”).

2. Institute of Internal Auditors (International Standards for the Professional
Practice of Internal Auditing) (the “Red Book”).

Section 20,055(5)(a), Florida Statutes, provides the Inspector General the choice
of which standard to follow in conducting audits. Historically, the IG has applied
the Yellow Book standards.

Types of Audits

The U.S. General Accounting Office has issued auditing standards for two basic
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types of government audits:

PERFORMANCE AUDITS are objective and systematic examinations of
evidence for the purpose of providing an independent assessment of the
performance of an existing or proposed government organization, program, or
activity in order to provide useful information to improve public accountability and
decision-making. Performance audits include economy and efficiency and
program audits, and are defined as follows.

Economy and efficiency audits - include determining (a) whether the entity is
acquiring, protecting, and utilizing its resources (such as personnel, property,
and space) economically and efficiently, (b) the causes of inefficiencies or
uneconomical practices, and (c) whether the entity has complied with laws and
regulations concerning matters of economy and efficiency.

Program audits - include determining (a) the extent to which the desired results
or benefits established by the legislature or other authorizing body are being
achieved, (b) the effectiveness of organizations, programs, activities, or
functions, and (c) whether the entity has complied with significant laws and
regulations applicable to the program.

FINANCIAL AUDITS include financial related and financial statement audits, and
are defined as follows:

Financial related audits - include determining (a) whether financial information is
presented in accordance with established or stated criteria, (b) whether the entity
has adhered to specific financial compliance requirements, and (c) whether the
entity's internal control structure or specific areas of risk over financial reporting
are suitably designed and implemented to achieve the control objectives.
Financial related audits may include audits of segments of financial statements,
contracts and grants, internal control reviews, and financial systems such as
payroll or procurement.

Financial statement audits - provide reasonable assurance about (a) whether the
financial statements of an audited entity present fairly the financial position,
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results of financial operations and cash flows, or changes in financial position in
accordance with generally accepted accounting principles (i.e., an opinion
statement audit), and (b) whether the entity has complied with laws and
regulations for those transactions and events that may have a material effect
upon the financial statements. Financial Statement audits are typically performed
annually by independent certified public accounting firms engaged by the District.
The District’s Governing Board selects the accounting firm and the Inspector
General manages the contract administrative matters.

Responsibilities of District's Management and Staff

We operate on the following basic premises, that the District's management and
staff:

 have a responsibility to apply resources efficiently, effectively, and
economically so that taxpayers receive value for their money,

 are accountable to the public and to other levels and branches of
government, and

 are responsible for establishing and maintaining effective internal control
systems to ensure:

 goals and objectives are met,

 district assets and resources are safeguarded,

 laws and regulations are followed, and

 reliable data are obtained, maintained, and accurately reported.
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Office of Inspector General Professional Conduct
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PROFESSIONAL CONDUCT

This section concerning professional conduct constitutes a guide for the
professional staff of the Office of Inspector General. Taken as a whole, this section
calls attention to the fact that the staff in the Office of Inspector General is held to
high standards of trust, independence, objectivity, confidentiality and competence.
The Staff must be committed to avoidance of conflicts of interest and to the full
disclosure of actual or potential impairments.

Staff shall review and comply with HR Policies and procedures, which are
incorporated into the District’s Policies and Procedures.

Independence - Most products of the Office of Inspector General recommend
improvements to existing policies, practices and operational aspects of the
District. It is therefore essential that the audit staff be independent and be
perceived as such. The independent attitude should indicate to all that the work
efforts of the office are unbiased and impartial with respect to the presentation of
any finding or recommendation. The opinions and conclusions that staff derives
from audits, reviews and investigations must be based on facts, evidence and
analysis irrespective of the influence of Department managers.

Each staff member shall complete a Statement of Independence at the time of
assignment to an audit, review or investigation. After review by the Inspector
General, the signed statement will be included in the audit working papers.

Conflict of Interest - Staff members should be neither advocates nor adversaries
of any special interest party. At no time should they allow their views or personal
situations impair their judgment and depth of reporting. Any official, professional,
personal or financial relationships that might affect the staff member's objectivity
or limit the extent of the analysis or the disclosure of findings should be disclosed
to the Inspector General prior to the beginning of an assignment.

Integrity and Objectivity - No member of the staff shall knowingly misrepresent
the facts in the presentation of findings developed during an audit. To ensure
staff integrity, it is expected that work assignments have been adequately
planned and relevant data have been sufficiently analyzed on which reasonable
conclusions and/or recommendations can be made.

Confidentiality – Records shall not be removed from the auditee’s premises
without permission. Staff members shall not discuss the status of ongoing
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internal audits or investigations with persons that are not a necessary part of the
project. Inquiries from the media and public should be referred to the Public
Records Coordinator in the Office of Board and Executive Services. Inspector
General staff members should also notify the Director of Auditing and the
Inspector General of any such requests they receive. No confidential information
obtained in the conduct of work assignments that is not available to the general
public shall be disclosed to others. This statement does not relieve employees
from their obligations under the laws of the State of Florida governing public
documents, nor does it restrict the exchange of information with any duly
constituted legislative, investigative or disciplinary body.

Demeanor - It is expected that at all times during the course of business staff will
present themselves in a professionally acceptable fashion. The demeanor of
staff while on duty must reflect positively on the image of the Office of Inspector
General and the District.

Codes of Ethics - Employees of the Office of Inspector General have an
obligation to the State of Florida and to the District to maintain high standards of
professional conduct. Staff should thoroughly familiarize themselves with the
code of ethics of the District (see Employee Ethics pamphlet). The Office has
also adopted the Code of Ethics of the Institute of Internal Auditors (See
http://www.theiia.org/?doc_id=92 ). All employees of the Office are affiliated with
this organization and adherence to this code is required in the daily performance
of auditing duties.